P&G's Lafley Also Must Face the Music

Last Updated Oct 14, 2008 3:57 PM EDT

pg_old_logo.jpgA.G. Lafley is something of a rock star when it comes to modern CEOs. After taking the reins of Procter & Gamble eight years ago, he has doubled revenues and brought stability to the consumer goods giant. His book on changing the rules of business has been a knock-out bestseller.

But today, Lafley must face the music. He must bear the fretting of shareholders at the firm's annual meeting in Cincinnati.
Shareholders, many of them fiercely loyal P&G retirees, are worried that the blue chip stock has become, well, just a stock like any other. They are used to P&G's shares being a steadfast Rock of Gibraltar in any market storm.

Although P&G's shares bounced back nicely yesterday to $63.29/share and are trading somewhat higher so far today, they had taken a 13.2 percent plunge during the recent market meltdown, hitting a 52-week low of $54.92/share on Friday.

So, Lafley will have to reassure his critics.

What's more, P&G is being hit with a "Say on Pay" resolution submitted by the National Legal and Policy Center. With it, Lafley is taking it on the chin.

The resolution from NLPC President Peter Flaherty reads: "Procter & Gamble CEO A.G. Lafley is making over $25 million a year. I understand that he can walk away with an additional $80 million. At the same time, his employees and customers are watching their jobs and retirement funds evaporate. It is too bad that the P&G board has not done its job, but it is understandable. Many of the directors are similarly overcompensated."

Management recommends voting against the resolution.